Starting a business in Belgium is a great opportunity due to the country’s strong economy, central location in Europe and diverse population.
The country’s economy has outperformed most of its neighbours since the pandemic, thanks to a successful vaccination campaign and fiscal policies that have been able to protect the incomes of citizens and businesses from severe economic shocks.
Belgium’s economy is set to return to a pre-pandemic pace from 2026, according to an analysis by the Brussels Institute for Statistics and Analysis (IBSA).
In 2024, Belgium’s GDP grows by 0.4 per cent and unemployment falls to 5.5 per cent.
Belgium’s vacancy rate remains one of the highest in Europe at 4.4 per cent, compared to the EU average of 2.6 per cent.
The minimum wage in Belgium has increased to €2,029 from April 2024. The country has thus become one of the five European countries where the minimum wage exceeds 2,000 euros.
Let’s take a look at the benefits and risks of starting a business in Belgium.
The advantages of starting a business in Belgium.
- Open economy. Belgium among the world’s largest exporters. No trade restrictions, favourable environment for entrepreneurs.
- According to the World Bank, Belgium ranks second in Europe in such indicators as ‘Ease of doing business’, ‘Ease of starting a business’ and ‘Payment of taxes’.
- Ideal base for entering the European consumer market. More than 500 million consumers within a radius of 800 kilometres.
- Belgium’s cultural diversity: an ideal market for testing new products.
- Close proximity to major production centres and markets.
- Belgium is easily accessible from Europe and the rest of the world thanks to its excellent infrastructure and transport links: sea and inland ports, airports, railways, extensive road network.
- Low real estate prices compared to neighbouring countries.
- Tax system is favourable for business, with tax incentives for foreigners and small businesses.
Pros of the tax system, according to Tax Foundation analyses
- Belgium has a wide network of tax treaties with 95 countries and a territorial tax system, as it fully exempts dividends and capital gains received from abroad without any country restrictions.
- Capital gains derived from ordinary private wealth management are exempt from tax.
- Business investments in machinery, buildings and intangible assets receive better than average corporate write-off treatment.
Risks
- High recruitment costs due to high social contributions. Companies need to be as legally savvy as possible to hire staff in Belgium.
- Cultural diversity can be an advantage as well as a challenge. Since Belgium has three official languages: Dutch, French and German, this can complicate negotiations and slow down business in Belgium.
- Bureaucracy. Although compared to other countries in Europe, things don’t look so sad.
- High cost of living.
Cons of tax system
- Belgium levies one of the highest tax rates among OECD countries at 30% on dividends, royalties and interest payments.
- Belgium levies an inheritance tax and a financial transaction tax, and has introduced a new annual tax on securities accounts.
- Belgian labour tax wedge is the highest among OECD countries, with a 53 per cent tax burden on a single worker with an average salary.
taxfoundation.org/location/belgium/page/2/
